Personal finance: Return of small saving schemes
In fact between April and December 2013, deposits into the public provident fund grew to Rs 1,391.43 crore as against Rs 1,169.12 crore a year ago, according to data released by the Controller General of Accounts.
More importantly, contributions to saving deposits and certificates too have witnessed a revival after a steady erosion over the past few years. CGA data revealed that these contributions to these schemes jumped up to Rs 1,732.88 crore in the first three quarters of this fiscal, compared to net withdrawals of Rs 460 crore a year ago.
The finance ministry is also hopeful that the full year target for Rs 7,820.02 crore from PPF contributions is also likely to be met. ďThere has been a resurgence in small saving schemes such as the PPF over the last few due to high inflation that has made fixed deposits relatively unattractive,Ē pointed out a senior government official.
The returns on these instruments, which were once seen by investors as their greatest drawback, is now being considered by investors as safe and stead, the official argued.
While the vastly popular PPF offers an interest rate of 8.7 per cent, the 10-year National Savings Certificate has a return of 8.8 per cent and even plain vanilla products like the one year time deposit offer a return of 8.2 per cent this fiscal.